THE   NICARAGUA   CANAL. 


WOULD  IT  PAY  THE  UNITED  STATES  TO  CONSTRUCT  IT? 


REMARKS 

OF 

C.   P.   HUNTINGTON 

AT   THE 

SEVENTH   ANNUAL  BANQUET  OF  THE 

CHAMBER  OF  COMMERCE  OF  GALVESTON,  TEXAS, 

MARCH  16,   1900. 


ADDRESS. 

I  came  here  at  your  invitation,  and  am  glad  to  be  with  you 
in  this  City  of  Galveston.  From  this  time  forward  I  am  sure 
your  city  will  be  one  of  the  great  lines  of  commerce  ;  primarily 
on  account  of  the  natural  advantages  which  you  have  always 
possessed,  but  immediately  because  of  the  advantages  and  facili- 
ties which  you  have  created  yourselves,  from  which  you  should 
and  no  doubt  will  get  great  returns.  With  this  increase  of 
advantages  the  circumstances  have  changed  also.  The  great 
trade  between  Eastern  Asia  and  Western  Europe  enriched  both 
the  East  and  the  West  and  built  up  great  cities  along  the  line 
that  it  traversed.  This  last  change  has  brought  one  of  these 
great  lines  'of  trade  and  commerce  your  way.  Your  beautiful 
city  has  always  been  at  the  gate  of  the  sea,  but  the  gate  has 
hitherto  been  closed.  It  is  open  now,  and  I  hope,  for  all  future 
time,  to  one  of  the  most  beautiful  bodies  of  water  in  our  world. 
The  modes  of  transportation  have  changed.  The  time  was  when 
much  of  it  was  done  by  men  carrying  packs  upon  their  backs. 
From  man  to  brute  the  burden  was  shifted,  and  for  many  years 
commerce  was  handled  in  that  way,  and  while  transferred,  no 
doubt,  from  one  animal  to  another,  yet  it  stayed  longer  with  the 
camel  than  with  any  other  medium ;  and  very  likely  those  who 
used  this  brute  power  thought  the  best  possible  method  of  trans- 
portation for  man  and  merchandise  had  been  attained.  Time  was 
not  much  of  a  factor  then.  The  man  may  be  now  living  who  was 
born  before  time  and  speed  were  counted  as  among  the  important 
factors  of  trade  and  travel.  When  that  primitive  railroad  in 
Massachusetts  was  built  from  Quincy  to  the  seashore,  the  presi- 
dent of  the  company  in  his  annual  report  said  they  had  used 
different  kinds  of  power — oxen,  mules  and  horses — and,  while 
oxen  had  been  found  rather  slow,  still  all  were  in  the  main  satis- 
factory. 


Benjamin  Franklin,  in  one  of  his  letters  when  he  was  Post- 
master-General, wrote  that  he  believed  the  time  would  come  when 
the  mail  would  be  carried  between  Washington  and  Boston  in  ten 
days  with  considerable  regularity.  To-day,  if  it  is  not  carried  in 
about  the  same  number  of  hours,  there  is  sharp  inquiry  why  the 
mail  is  so  delayed.  What  would  Franklin  say  to-day  if  he  could 
be  here  to  see  the  changes  that  time  and  genius  have  wrought  ? 
If  he  could  emerge  from  his  crude  laborato^  to-day,  step  into  a 
telephone  office,  and,  while  he  watched  with  astonished  eyes  the 
rapid  progress  through  the  streets  of  loaded  trolley  cars  drawn  by 
no  visible  force,  could  hear  a  friend  at  Chicago  describe  to  him, 
in  a  well-recognized  voice,  the  electrical  wonders  of  the  nineteenth 
century,  would  he  not  have  a  right  to  say  to  himself  with  a  thrill 
of  justifiable  pride  :  "  Certainly,  when  I  drew  the  lightning  from 
the  clouds,  I  builded  better  than  I  knew. ' ' 

To  cheapen,  improve  and  quicken  transportation,  so  as  to 
make  the  old  ten-day  trips  from  Washington  to  Boston  and  the 
method  of  locomotion  by  means  of  oxen,  horses  and  mules  crude 
things  of  a  primitive  past,  the  canal  was  established,  and  this  was 
found  to  be  a  great  advance  indeed,  not  only  in  the  carrying 
capacity,  but  in  the  speed  secured  ;  but  the  canal  of  to-day  is  as 
far  behind  the  best  methods  of  transportation  as  that  was  better 
than  the  man,  the  mule  and  the  ox,  and  the  canal,  too,  should  be 
relegated  to  the  old  scrap  heap  of  the  past ;  but  the  idea  is  dying 
slowly,  and  there  are  a  few  people  even  to-day  who  are  looking 
forward  from  the  canal  to  the  ox,  and  thinking,  perhaps,  that  it 
would  be  a  good  thing  to  let  well  enough  alone,  and  that  the 
canal  can  still  compete  with  the  locomotive,  or,  at  least,  be  a 
check  upon  its  encroachments  ;  and  they  look  about  them  without 
fully  realizing  the  inevitable  trend  of  the  new  forces  that  are  sure 
to  make  the  canal  impossible  in  modern  life,  as  the  canal  uprooted 
the  old  notions  which  tended  in  the  single  direction  of  "  getting 
there,"  without  much  regard  to  the  time  of  arrival. 

Nearly  all  the  canals  which  were  built  in  the  first  half  of  the 


present  century  are  used  no  more,  and  the  waters  have  been  let 
out  of  them,  with  perhaps  two  or  three  exceptions.  The  Erie 
Canal,  in  the  great  and  enterprising  State  of  New  York,  remains 
to  vex  the  -people  with  the  problem  of  its  continued  existence, 
and  it  remains,  I  think,  more  because  it  was  built  by  one  of  New 
York's  greatest  and  best  men,  De  Witt  Clinton,  than  for  any 
other  reason.  Many  times  has  it  paid  for  itself,  and  I  think  the 
old  thing  deserves  now  to  be  allowed  to  have  its  long-needed 
rest,  and  to  die  peacefully  in  its  bed.  Yet  there  are  a  number  of 
people  who  are  trying  by  all  means  in  their  power  to  call  it  back 
to  life  in  the  only  way  possible — by  the  transfusion  of  blood ; 
and  blood  in  a  case  of  this  kind  means  an  appropriation  of  the 
people's  money.  It  is  the  old  story  over  again,  of  the  farmer 
who  carried  his  wheat  to  mill  on  the  back  of  his  horse,  balancing 
the  bag  by  putting  the  wheat  in  at  one  end  of  it  and  a  sixty- 
pound  stone  in  the  other.  A  stranger,  meeting  him  on  the  road- 
way, asked  why  he  did  not  put  half  the  wheat  in  each  end  of  the 
bag  and  throw  away  the  stone.  At  this  he  seemed  somewhat 
puzzled,  but  finally  said  :  "  My  father  did  it  this  way,  and  so 
did  my  grandfather,  and  I  think  they  are  wiser  than  you. ' ' 

A  few  weeks  ago  "it  looked  as  if  the  people  of  New  York 
State  were  going  to  consent  to  spend  sixty  millions,  or  some 
other  vast  sum,  out  of  their  own  pockets,  to  widen  and  deepen 
the  Erie  Canal ;  but  I  understand  that  the  attempt  to  pass  that 
appropriation  has  been  given  up  for  this  year.  If  the  people  of 
New  York  should  ever  do  this  they  will  certainly  commit  as  great 
a  blunder  as  it  would  have  been  a  mistake  not  to  have  built  the 
canal  when  they  did,  and  when  it  was  the  best  known  means  of 
transportation.  There  is  no  doubt  the  railroads  now  running 
between  Buffalo  and  New  York  can,  for  the  $2,400,000  which 
would  represent  4  per  cent,  interest  on  the  sixty  millions  pro- 
posed to  be  expended,  move  at  an  actual  profit  all  the  tonnage  that 
would  ever  pass  through  the  improved  canal,  to  say  nothing  of 
the  three  to  five  millions  ot  dollars  a  year  which  it  would  cost  to 


keep  the  canal  in  order  and  pay  the  expense  of  its  administration. 
Then,  again,  the  difference  in  the  time  it  would  take  by  the  two 
methods  of  transportation  to  get  the  goods  and  products  to 
market  would  represent  a  very  large  sum,  for  a  farmer  living 
within  the  great  watershed  of  the  Mississippi  River  could  send 
his  grain  to  market  by  rail  and  have  the  money  in  his  pocket 
before  the  canal  could  take  the  product  to  its  destination. 

The  world  is  moving  on,  however,  and  as  time  goes  on  it 
brings  brighter  lights  to  bear,  and  so  I  do  not  believe  that  the 
people  of  New  York  are  going  to  vote  that  appropriation  of 
$60,000,000  to  resuscitate  this  thing  of  the  past.  The  mistakes  of 
recent  years  in  the  direction  of  canal  building  are  being  recog- 
nized. I  am  credibly  informed  that  the  celebrated  Manchester 
Canal,  in  Kngland,  constructed  within  a  very  few  years,  as  the 
history  of  commerce  runs,  at  an  enormous  expenditure  of  money, 
has  been  found  to  be  a  practical  failure.  The  Kiel  and  the 
Corinth  Canals  are  similar  commercial  failures,  and  the  abandon- 
ment of  canals  in  all  parts  of  our  own  country  are  cases  in  point, 
notably  the  recent  abandonment  of  the  Delaware  and  Hudson 
Canal.  The  president  of  this  company  stated  in  his  last  annual 
report  that  the  canal  belonging  to  that  company  was  abandoned 
because  ' '  the  cost  of  the  transportation  was  too  great  as  compared 
with  other  methods,"  and  another  officer  of  that  company  has 
said  that  the  president's  views  "have  been  vindicated  by  subse- 
quent results. ' ' 

The  enormous  falling  off  in  the  tonnage  of  the  Erie  and 
Welland  Canals,  and  the  changes  and  astounding  reductions  in 
the  traffic  of  rivers  in  all  sections  of  this  country  as  a  result  of  the 
competition  of  rival  railroads,  point  in  the  same  direction.  Dur- 
ing the  sixteen  years  from  1876  to  1892  the  tonnage  of  freight 
transported  on  the  lower  Mississippi  fell  41  ^  per  cent. ,  the  tonnage 
on  competing  railroads  increased  350  per  cent.,  and  the  sea  traffic 
of  New  Orleans  increased  70  per  cent. ,  and  this  deflection  of  com- 
merce from  the  Mississippi  to  competing  railroads  is  still  going  on. 


I  am  going  to  say  right  here  a  few  words  about  the  Nicara- 
gua Canal.  Maybe  you  are  all  in  favor  of  it,  as  I  am  told  it  has 
a  great  "pull,"  as  the  politicians  say,  although  just  why  I  do 
not  know.  Perhaps  I  am  going  to  make  myself  very  unpopular 
with  you  on  account  of  my  ideas  regarding  the  Nicaragua  Canal, 
but  you  will,  I  know,  give  me  the  credit  of  doing  a  citizen's  duty 
in  daring  to  say  what  I  think  about  this  much-mooted  project. 
I  am  not  one  of  those  who  like  to  put  chucks  under  the  wheels  of 
progress ;  nor  do  I  believe  in  trying  to  defeat  the  aims  of  my 
Government  after  it  has  taken  a  decided  step  and  is  committed  to 
a  policy.  I  am  not  one  of  those  who,  while  our  soldiers  are 
fighting  under  the  American  flag  in  the  Philippines,  would  aid 
the  enemy  by  denouncing  the  policy  and  denying  the  rights  of 
the  Government.  I  believe  in  upholding  the  President's  hands 
in  the  march  he  is  leading,  and  I  am  always  for  the  flag,  whether 
at  home  or  abroad.  This  country  has  a  great  work  to  do.  I  will 
have  little  to  say  here  as  to  whether  the  war  with  Spain  was 
j  ustified  or  not,  but  war  came  and  went,  and  I  believe  it  is  better 
for  the  world  that  islands  that  came  to  us  as  the  result  of  that 
war  should  be  under  the  Stars  and  Stripes  than  that  they  should 
have  remained  under  the  flag  of  Spain  ;  as  it  ought  to  be,  and  I 
believe  will  be,  better  for  the  people  of  those  islands  to  be  with 
us  ;  and  better  for  us,  provided  we  should  deal  fairly  and  liberally 
with  them,  for  they  will  surely  pay  us  in  kind.  All  the  islands 
that  we  have  taken  we  must  keep,  and  deal  with  their  people 
firmly  but  kindly,  so  that  they  will  not  only  love  but  respect  us. 
Let  us  give  to  the  Filipinos  a  good  government  that  will  be  an 
object  lesson  to  all  the  people  of  Eastern  Asia.  In  doing  this  we 
shall  widen  our  sphere  of  influence,  so  that  the  millions  of  people 
in  China  will  welcome  our  incoming,  knowing  we  mean  them  no 
harm.  Let  us  ask  all  the  peoples  of  the  world  to  join  with  us  in 
giving  to  the  Chinese  such  moral  support,  if  nothing  else,  as  will 
induce  them  to  build  up  out  of  the  material  that  they  have  a 
great  homogeneous  empire  with  all  the  doors  of  commerce  open 


to  all  the  nations  of  the  earth.  This  will  suit  them,  for  they  are 
a  great  people.  I  say  this  not  only  with  belief,  but  with  knowl- 
edge, as  I  have  dealt  with  them  for  fifty  years,  and  can  say  that, 
as  a  people,  they  have  never  deceived  me.  L,et  us  help  them,  if 
need  be,  and  they  will  surely  pay  us  in  kind.  We  are  legitimately 
there,  and  there  to  stay,  and  no  one  will  say  us  nay,  so  long  as 
we  are  doing  what  is  right.  Because  of  our  so  dealing  with  them 
there  will  be  more  high-grade  goods  passing  through  your  city 
on  their  way  from  China  to  the  eastern  coast  of  America  than 
ever  passed  the  Euphrates  when  nearly  all  the  trade  between 
China  and  India  and  the  Mediterranean  and  Western  Europe 
passed  across  that  river. 

As  I  have  said,  it  is  too  late  now  to  deprecate,  even  if  we 
would,  the  action  of  our  Government  resulting  from  the  recent 
war  with  Spain.  Those  who  believe,  as  I  do,  in  the  wise  and 
commendable  policy  which  is  being  steadily  developed  and  car- 
ried out  in  the  East  by  the  present  Administration,  and  those  who 
have  doubts,  should  now,  it  seems  to  me,  stand  by  the  men  who 
are  at  the  helm  of  state,  steering  a  difficult  course  toward  the 
harbor  of  enduring  peace  and  prosperity,  doing  it  with  honesty 
of  purpose ;  that  is,  holding  to  the  Golden  Rule.  L,et  us  stand 
by  them  to-day,  for  that  means  standing  by  the  flag.  Does  any 
one  believe  that  in  twenty-five  years  from  to-day  there  will  be  in 
this  broad  land  a  single  intelligent  citizen  who  will  look  back  to 
the  history  we  are  making  to-day  and  wish  that  his  country  could 
return  to  the  conditions  of  yesterday  ? 

The  time  to  argue,  to  expostulate,  to  protest,  is  before  a 
thing  is  done,  and  not  afterward  ;  and  it  is  not  only  the  right  of 
every  citizen  to  say  what  he  thinks  about  the  Nicaragua  Canal, 
but  it  is  his  duty  to  do  it,  and  to  do  it  now  before  the  Govern- 
ment shall  take  a  decisive  step  and  become  committed  to  a  definite 
future  policy  ;  for  when  we  shall  once  have  commenced  upon  that 
enormous  scheme,  the  building  of  the  Nicaragua  Canal,  the  people 
of  this  country  will  find  themselves  committed  to  a  work  which 


will  cost  them  more  millions  of  money  than  they  dream  of.  Nor 
is  money  the  only  thing  which  will  be  expended.  I  know  the 
country  through  which  it  is  proposed  to  dig  this  great  ditch,  and 
I  believe,  if  it  should  be  built,  it  would  cost  more  human  lives 
than  any  other  work  that  has  been  done  in  all  the  years  since  man 
existed.  For  many  miles  at  its  eastern  end  the  country  is  low- 
lying  land,  where  the  black  muck  is  concentrated  poison,  and 
especially  deadly  to  any  one  who  moves  or  stirs  it.  To  think 
of  cutting  a  ditch  through  earth  like  that  for  ships  700  feet  in 
length,  with  80  feet  beam,  and  drawing  30  feet  of  water — and 
ships  of  these  dimensions  are  being  built — seems  to  me  an  under- 
taking fraught  with  the  greatest  peril  to  all  engaged  in  it ;  and  I 
am  satisfied  that  a  canal  of  dimensions  sufficient  to  accommodate 
such  vessels  will  cost  not  less  than  two  hundred  and  fifty  millions 
of  dollars. 

Fifty  years  ago,  when  I  was  beginning  my  life  work  in  San 
Francisco  as  a  merchant,  I  heard  that  the  United  States  Govern- 
ment and  the  Government  of  Great  Britain  had  entered  into  a 
compact,  in  the  so-called  Clay  ton- Bui  wer  Treaty,  to  stand  by  and 
protect  any  individual  or  company  which  might  with  private 
capital  come  forward  to  construct  the  Nicaragua  Canal.  The 
treaty  afforded  ample  protection  to  all  persons  and  property  em- 
ployed in  constructing  the  canal,  the  whole  world  supposed  that 
capital  and  enterprise  would  come  to  the  front  at  once  with  the 
purpose  of  opening  up  to  navigation  this  highway  between  the 
two  oceans ;  but  fifty  years  have  come  and  gone  and  no  canal, 
nor  even  a  beginning  of  a  canal,  is  seen.  Then  about  the  year 
1860,  ten  years  after  the  Clay  ton-Bui  wer  Treaty  was  signed,  the 
Suez  Canal  was  begun  and  within  the  space  of  ten  years  was 
completed  by  private  capital,  with  little  or  no  government  pro- 
tection, and  at  about  the  estimated  cost  of  the  Nicaragua  Canal 
as  arrived  at  by  the  engineers.  It  was  opened  in  the  year  1869, 
more  than  thirty  years  ago.  As  it  affords  a  shorter  route  to  Asia 
and  Australia  by  from  four  to  six  thousand  miles  than  by  an 


8 

American  isthmian  route,  it  also  affords  a  better  route,  all  things 
considered,  for  commerce  between  New  York  and  Asia  and 
Australia.  Then,  in  the  year  1869,  the  first  transcontinental 
railroad  was  completed,  and  to-day  we  have  in  all  six  transcon- 
tinental roads,  including  the  Canadian  Pacific.  One  of  these — 
our  Southern  Pacific — has  its  principal  Eastern  terminus  at 
Galveston.  The  result  has  been  that  the  people  interested  in  the 
Nicaragua  Canal  scheme  have  been  obliged  to  abandon  the  idea 
of  constructing  it  as  a  commercial  enterprise  for  private  capital, 
and  for  the  last  ten  or  twelve  years  they  have  been  importunate 
beggars  at  Washington  for  Government  aid  to  an  amount  esti- 
mated all  the  way  from  one  hundred  to  two  hundred  and  fifty 
millions  of  dollars.  I  have  believed,  just  as  the  financiers  of  the 
world  have  believed  during  the  last  fifty  years,  that  the  Nicaragua 
Canal  would  be  a  flat  failure  as  a  commercial  enterprise  ;  but 
within  a  few  months  a  new  proposition  has  come  to  the  front, 
and  it  is  an  alarming  one,  as  it  endangers,  in  my  opinion,  the 
interests  of  the  whole  people. 

Some  of  our  ablest  and  best  men  in  Congress  are  favoring  it, 
but  this  is  only  evidence  to  me  that  no  one  man  can  know  every- 
thing, and  that  no  man  can  be  particularly  strong  except  in  the 
prosecution  of  work  with  which  he  is  familiar.  I  have  been  in 
the  transportation  business  for  some  fifty  years,  having  had  no 
other  regular  vocation,  and  my  experience  makes  me  confident 
that  when  all  the  elements  and  influences  that  are  factors  in  this 
question  are  brought  into  the  full  light  it  will  be  seen  that,  as  a 
commercial  enterprise,  the  Nicaragua  Canal  must  prove  a  failure, 
and  as  unfortunate  a  one  as  those  of  John  L,aw,  and  the  origina- 
tors of  the  great  "South  Sea  Bubble." 

It  is  assumed  by  those  in  favor  of  the  canal  that  4,000,000 
tons  will  pass  through  it  annually  at  a  toll  of  $1.55  per  ton,  which 
is  about  the  rate  now  charged  on  the  Suez  Canal,  and  that,  there- 
fore, the  income  of  the  canal  would  be  $6,000,000.  Taking  the 
low  estimate  of  these  friends  of  the  measure,  that  the  canal  would 


cost  $140,000,000,  simple  interest  on  which  at  4  per  cent,  would 
be  $5,600,000 ;  adding  to  this  the  cost  of  maintaining  and  repair- 
ing the  canal  and  its  two  harbors,  and  of  operating  it,  which 
could  not  well  be  less  than  $5, 000,000  per  annum,  and  you  have 
altogether  $10,600,000  per  year  to  be  met  by  an  income  of 
$6,000,000.  Taking  my  own  estimate  of  $250,000,000  as  the 
cost — and  I  have  a  good  deal  of  respect  for  my  own  estimate  in  a 
matter  of  this  kind — you  have  $15,000,000  per  annum  as  the 
charge  against  this  canal,  as  against  an  income  of  $6,000,000. 
Statisticians  outside  of  Congress  and  the  Government  figure  the 
probable  tonnage  as  low  in  some  cases  as  300,000  tons  a  year, 
instead  of  4,000,000  tons. 

But  even  on  the  violent  assumption  that  toll  should  be 
charged  on  the  tonnage  passing  through  the  canal  sufficient  to 
pay  this  $15,000,000,  let  me  tell  you  that  the  railroads  of  this 
country  can  be  contracted  with  to  take  the  same  tonnage  by  rail 
between  New  York  and  San  Francisco  and  deliver  it  in  less  than 
half  the  time,  insuring  the  goods  besides,  for  that  same  or  less 
sum. 

Some  people,  also,  would  disregard  the  commerce  question 
and  make  the  canal  free  of  toll  to  ships  built  in  American  ship- 
yards, of  American  capital  and  by  American  labor,  and  filled  with 
American  merchandise.  What  do  we  have  as  the  showing  now  ? 
I^et  me  call  your  attention  to  two  tables,  showing  the  value  of 
the  foreign  carrying  trade  of  the  United  States  by  sea  in  Ameri- 
can and  foreign  vessels,  respectively : 

IMPORTS. 

American  Vessels.        Foreign  Vessels.    Percentage. 
Year  ending — 

June  30,  1898 193.535,867  $492,086,003  16 

June  30,  1899 107,462,239  651,198,204  16 

EXPORTS. 

June  30,  1898 $67,792,150        $1,090,406,476  5.9 

June  30,  1899 85,784,710          1,076,851,445  7-6 


10 


The  tonnage  of  American  and  foreign  sailing  and  steam 
vessels  entered  into  the  seaports  of  the  United  States  from  foreign 
countries  was  as  follows : 


-June  30 


Sailing  Vessels-^  1898.  1899. 

American 1,490,505  1,472,163 

Foreign 3,109,229  2,777,236 

Steam  Vessels — 

American 3,707,568  3,867,184 

Foreign 17,232,214  17,985,641 

CLEARED. 

, r June  30 > 

Sailing  Vessels—  1898.  1899. 

American 1,458,243  1,523,749 

Foreign 3,181,742  2,696,924 

Steam  Vessels — 

American 3,652,604  3,937,899 

Foreign I7,355,<>43  I7,99°»122 

Cannot  any  intelligent  man,  after  seeing  the  immense  per- 
centage in  favor  of  foreign  vessels  as  shown  in  these  tables, 
understand  that  the  discrimination  against  foreign  vessels  is  going 
to  drive  them  to  the  Suez  waterway,  and  that  the  tonnage  through 
Nicaragua,  confined  almost  exclusively  to  American  vessels, 
would  result  in  the  Government's  getting  practically  no  income 
from  the  venture  ? 

Some  people,  however,  are  in  favor  of  disregarding  entirely 
the  question  of  commercial  value — that  is,  of  getting  returns  on 
the  vast  investment — and  making  it  a  free  canal ;  but  why  the 
American  people  should  saddle  themselves  with  an  enormous  bur- 
den of  this  kind,  the  chief  benefits  of  which  are  to  inure  to  foreign 
nations,  which  own  95  per  cent,  of  the  tonnage  of  the  seas,  is 
beyond  my  comprehension ;  and,  if  you  reflect  upon  it,  I  think  it 
will  be  beyond  yours. 

As  between  the  Suez  and  the  Nicaragua  Canals,  the  busi- 
ness between  Western  Europe  and  Eastern  Asia  would  naturally 
go  the  way  of  the  Suez  Canal,  which  is  the  shortest  line.  The 
Suez  Canal  ought  not  to  have  cost  more  than  a  tenth  of  what  the 


II 

Nicaragua  Canal  will  cost,  as  in  the  former  case  it  was  only  the 
digging  out  between  the  Mediterranean  and  the  Red  Seas  of  what 
I  have  no  doubt  was  the  bed  of  an  old  seaway  between  those 
bodies  of  water ;  the  material  being  sand,  it  was  easily  dug  and 
the  waters  of  the  two  seas  were  allowed  to  unite  again  as  they 
had  no  doubt  united  many  years  before.  There  is  no  railroad  to 
compete  with  the  Suez  Canal,  which  connects  great  commercial 
and  industrial  nations ;  whereas,  an  American  isthmian  canal 
would  connect  two  vast  unproductive  oceans.  The  signs  of  the 
times  are  that  some  of  the  great  schemes  of  railroad  building  in 
Asia  will  be  carried  through,  and,  if  a  single  railroad  as  effective 
as  any  one  of  the  transcontinental  lines  which  connect  the  Atlan- 
tic and  Pacific  coasts  of  the  United  States  should  be  built  to  com- 
pete with  the  Suez  Canal,  it  would  at  once  take  from  that  water- 
way the  entire  carriage  of  passengers,  mails,  express  and  perish- 
able goods,  and  high-cost  freights  generally,  leaving  to  it  only 
the  lower-class  freights,  the  insurance  on  which  is  small,  while 
the  time  is  not  important. 

Of  course  it  would  be  somewhat  different  in  handling  the 
business  eastward  between  Asia  and  the  east  coast  of  America, 
for  it  would  have  to  be  put  into  ships,  and  the  ships  not  con- 
trolled by  the  American  railroads  would  hold  the  tonnage  as  long 
as  they  could,  which  would,  of  course,  send  some  ships  through 
the  Nicaragua  Canal,  as  in  following  that  route  they  would  hold 
the  business  from  start  to  finish  ;  but  in  doing  this  they  would 
steer  clear  of  our  west-coast  cities,  and  this  would  do  much  harm 
to  those  towns,  and  they  would  find  when  too  late  that  they  were 
on  the  shun  pike  and  not  on  the  main  line. 

Neither  the  Panama  nor  the  Nicaragua  Canal  is  on  the  line 
of  any  great  independent  commercial  movement.  They  are 
merely  points  at  which  certain  ocean-steamer  lines  would  touch. 
The  total  tonnage  passing  through  the  Suez  Canal  the  first  six 
months  of  1898  was  nearly  5,000,000  tons,  and  of  this  only  some 
fifteen  hundred  odd  tons,  or  3-100  of  i  per  cent,  was  American  !  For 


/  I2 

that  same  period  the  tonnage  entered  at  ports  of  the  United  States 
from  foreign  countries  amounted  to  nearly  twenty-one  and  three- 
quarter  millions,  and  only  16  per  cent,  of  this  was  American.  It 
would  certainly  seem  that  we,  as  a  nation,  could  better  afford  to 
work  up  our  merchant  marine  to  respectable  proportions  by  all 
the  legitimate  and  liberal  means  in  our  power  before  we  entered 
on  the  construction  of  a  canal,  90  per  cent,  of  the  benefits  of 
which,  if  any,  would  inure  to  ships  of  other  nations.  The  Suez 
Canal  has  an  advantage  over  the  Nicaragua  route  for  the  trade 
between  Western  Europe  and  Manila. 

Then,  again,  the  Suez  Canal  is  a  sea-level  canal,  whereas  the 
Nicaragua  Canal  involves  220  feet  of  lockage.  A  great  economic 
factor  in  all  this  traffic  is  the  price  of  coal,  and  in  this  and  in  the 
location  of  coaling  stations  the  Suez  route  is  greatly  superior  to 
either  Nicaragua  or  Panama. 

And  there  is  a  consideration  with  regard  to  the  proposed 
Nicaragua  Canal  that  I  think  is  probably  not  given  due  weight. 
While  the  average  rainfall  at  Suez  is  about  two  inches  annually, 
the  precipitation  at  the  eastern  end  of  the  Nicaragua  Canal  has 
amounted  to  twenty-five  feet  in  a  single  year.  This  vitally 
affects  the  question  of  the  permanence  of  earthworks,  and  bears 
importantly  on  the  question  of  navigation. 

They  tell  us  that  the  Nicaragua  Canal  is  a  military  necessity, 
but  I  think  not,  and,  in  fact,  I  think  the  arguments  against  it  on 
military  grounds  ought  to  be  convincing.  With  such  a  canal 
open  to  all  the  nations  of  the  earth,  in  time  of  war  none  of  them 
would  have  an  advantage  over  the  other.  All  the  great  nations 
of  Western  Europe  could  send  their  ships  of  war  through  it  so  as 
to  reach  our  western  coast,  say,  in  twenty-five  days.  Without 
the  canal  they  would  have  to  send  their  battleships  around  Cape 
Horn  or  go  through  the  Straits  of  Magellan,  occupying,  say, 
eighty,  and  the  enemy  could  prevent  our  using  the  canal  the 
same  as  we  could  prevent  their  using  it,  so  that  it  would  seem  to 
me  that  the  best  thing  to  be  done  in  time  of  war  would  be  to 


blow  up  the  locks  in  order  that  no  ships  could  use  the  canal. 
Our  Government  could  contract  with  five  railroads,  or,  for  that 
matter,  with  any  one  of  five,  to  transport  all  the  men  and  mu- 
nitions of  war  that  they  would  need  in  any  six  months  across  the 
continent  to  San  Francisco  in  forty  days,  and  could  transport  a 
million  of  men  in  ten  days  if  the  need  should  be  great. 

Few  people  understand  the  difference  between  one  railroad's 
competing  with  another,  or  its  competing  with  sea  commerce. 
All  the  fixed  and  current  expenses  of  a  railroad  must  be  paid  out 
of  the  business  that,  you  may  say,  belongs  to  the  rail.  The 
fixed  expenses  of  a  railroad  are  the  great  expenses.  Any  of  the 
through  lines  between  New  York  and  San  Francisco  probably 
represents  in  its  total  cost  a  billion  or  more  of  dollars,  the  interest 
on  which,  at  4  per  cent. ,  is  forty  millions  of  dollars.  The  taxes 
are  probably  five  millions.  There  are  not  less  than  80,000  men 
employed,  and  all  this  belongs  to  the  fixed  expenses.  Now, 
when  we  compare  with  the  seas,  the  railroads  figure  that,  if  they 
can  make,  say,  on  running  a  train  through  from  New  York  to 
San  Francisco,  $100  of  clear  net  money  over  the  actual  cost  of 
the  movement  of  the  train,  they  will  take  the  business  on  the 
theory — which  I  think  is  a  true  one — that  it  adds  $100  in  net 
money  to  their  income,  which  helps  out  the  local  business  to  that 
extent. 

Perhaps  I  have  occupied  too  much  of  your  time  on  this 
question  of  an  American  isthmian  canal,  but  my  excuse  for  it  is 
that  I  do  not  make  many  speeches  in  public,  and  when  I  am 
called  upon  to  speak  I  like  to  talk  about  practical  things  that 
mean  much  for  the  welfare  or  else  for  the  injury  of  our  country. 
If  I  do  not  believe  in  the  Nicaragua  Canal  it  is  because  I  have 
made  a  study  of  the  question  after  an  experience  of  sixty  odd 
years  in  business  life,  and  feel  somewhat  familiar  with  economic 
questions  affecting  the  commercial  interest  of  the  United  States. 
I  believe  that  in  advocating  the  enormous  expenditure  required 
to  build  the  Nicaragua  Canal  the  American  people  will  be  making 


14 

a  costly  mistake,  financially  and  commercially,  and  an  enormous 
blunder  in  military  policy.  If  this  step  should  be  taken,  these 
remarks  of  mine,  like  other  protests  which  have  been  made  in  the 
same  line,  may  become  historic.  I  sincerely  hope  that  no  action 
will  be  taken  the  future  result  of  which  will  recall  what  I  have 
said  as  words  of  prophecy. 

Let  me  bring  this  matter  nearer  home — to  Galveston,  the 
city  at  the  gate  of  the  sea,  with  the  gate  wide  open.  Probably 
no  other  city  in  the  United  States  contiguous  to  ocean  waters  has 
as  many  square  miles  of  territory  tributary  to  it,  or  is  the  natural 
embarkadero  of  such  an  immense  area  of  country,  as  is  your  City 
of  Galveston.  A  good  deal  of  it  is  dry  land,  to  be  sure,  but  the 
cry  of  irrigation  is  in  the  air,  and  the  Government  is  just  com- 
mencing to  store  up  the  waters  when  they  are  not  needed  and  let 
them  out  on  the  arid  lands  where  they  are  essential.  With  irri- 
gation your  State  will  blossom  like  the  rose,  and  Galveston  will 
be  her  chief  jewel/  The  Southern  Pacific  Company  is  about  to 
enter  pretty  largely  into  your  life,  I  hope  for  the  good  of  your- 
selves and  of  us.  I  believe  I  can  say  for  my  associates,  and  I 
know  I  can  for  myself,  that  our  policy  will  continue  to  be  what  it 
always  has  been. 

I  want  to  read  to  you  figures  from  another  table  which  I  have 
had  prepared.  These  are  official  figures  and  not  my  own,  and 
they  show  the  fall  of  rates  per  ton  per  mile  on  the  leading  rail- 
roads of  the  various  sections  of  the  country  from  1870  to  1898, 
and  the  figures  are  from  the  statistical  abstract  of  the  United 
States,  page  387 : 

Cents  per  Ton  per  Mile. 

1870.  1898.  Reduction. 

Group  of  lines—                                                           Cents.  Cents.  Cents. 

Lines  east  of  Chicago 1.61  .55  1.06 

West  and  northwest  lines 2.61  .94  1.67 

Southwestern  lines 2.95  .94  2.01 

Southern  lines 2.39  .62  1.77 

Transcontinental  lines 4.50  .99  3.51 

Average 1.99  .72  1.27 


15 

From  this  table  you  will  see  that  the  reduction  on  the  great 
lines  east  of  Chicago  from  1870  to  1898  has  been  1.6  cents  per 
ton  per  mile.  On  the  Western  and  Northwestern  lines,  roads 
running  through  fertile  countries  filled  with  avast  population,  the 
reduction  has  been  1.67  cents  ;  on  the  Southwestern  lines  it 
has  been  2  cents;  on  the  Southern  lines  it  has  been  1.77 
cents.  On  the  transcontinental  roads  it  has  been  3^  cents, 
or  more  than  on  any  other  class  of  roads  in  the  United  States, 
despite  the  disadvantage  of  a  thinly-populated  country,  with  long 
stretches  of  unproductive  soil  where  the  railroad  line  is  practically 
nothing  more  than  a  bridge  connecting  the  productive  portions. 
In  other  words,  the  average  rate  on  the  transcontinental  lines  in 
1898  was  considerably  less  than  one-fourth  the  average  rate  in 
1870.  I  think  this  clearly  illustrates  the  policy  of  development 
which  has  been  pursued  in  the  past,  and  which  is  building  up 
your  Southern  and  Western  country. 

The  railroad,  therefore,  is  doing  its  part,  and  it  only  remains 
for  you  to  do  yours,  in  order  to  grow  great  and  prosperous  as  a 
State.  You  ship  vast  amounts  of  the  crude  product  of  cotton. 
What  I  hope  to  see  your  State  do  is  to  make  its  raw  material  into 
something  that  is  more  valuable.  Manufactures  are  the  blood- 
life  of  an  energetic  State,  as  well  as  national  progress.  The  level 
to  which  the  arts,  manual  and  otherwise,  have  attained  in  any 
country  is,  most  other  things  being  equal,  the  measure  and 
criterion  of  their  progress  in  all  that  makes  a  people  enlightened, 
wealthy  and  prosperous.  In  the  building  of  a  great  ship,  for  in- 
stance, a  greater  diversity  of  employments  and  talents  is  brought 
into  play  than  in  the  manufacture  of  almost  anything  else; 
and  I  remember  once  saying,  at  the  launching  of  a  large  vessel 
in  Virginia,  that  the  actual  value  of  the  materials  in  the  ship — 
the  timber  in  the  forest,  the  coal  in  its  bed,  and  the  iron  in  the 
mine — probably  amounted  altogether  to  less  than  five  thousand 
dollars.  When  worked  up  through  art  and  manufacture  into  the 
completed  vessel  they  represented  a  value  of  over  five  hundred 


i6 

thousand  dollars ;  and  all  this  vast  increase  had  been  paid  for 
labor  and  gone  into  the  pockets  of  American  citizens  who  did  the 
work.  This  was  as  it  should  be.  I  want  to  see  your  vast  cotton 
product  transformed  into  fabric  right  here  within  the  borders  of 
your  own  State.  We  have  all  heard  the  illustration  of  the  ton  of 
iron  worth,  say,  twenty-five  dollars,  which,  when  worked  into 
watch  springs,  increased  in  value  to  many  hundreds  of  thousands 
of  dollars.  It  is  so  with  cotton  and  all  other  crude  products.  It 
is  the  manufacture  of  the  fiber  into  the  fabric  which  counts  for 
wealth.  I  want  to  see  looms  and  mills,  and  still  more  looms  and 
mills,  in  the  South,  and  I  hope  to  see  Galveston  advance  along 
these  lines  to  a  splendid  future ;  and  I  hope  to  see  the  State  of 
Texas  take  full  advantage  of  her  geographical  situation,  her 
beautiful  climate  and  her  fruitful  soil,  and  in  time  fulfill  her  right- 
ful destiny. 


